Bad Neighborhood: Guiyu

Several of my posts this year have defended small businesspeople in Asia, South America, and Africa, entrepreneurs who import used goods for repair and reuse, or who recycle things in respectable ways.

But to give BAN and Greenpeace their due, the best of intentions have potential for problems. The world is improving at a faster pace than it was before BAN raised money with pictures of children on scrap piles. Sure, even mothers milk can go sour, but that is a waste in more than one sense of the word, and as good as recycling is, we should be about wasting less and doing better. The current export debate is like a debate on distributing clean needles to addicts, or legalized prostitution, our differences are on the best way to reform ugly practices... If there were no "unfair" practices, the concept of "Fair Trade" of used electronics would make no sense. If we do too good a job defending clean needles, we can miss the fundamentals. Neither the Taliban or Mao tolerated clean needles, and their countries produced and consumed less heroin after a few well-timed beheadings.

When I visited China for the first time in late 2002, I visited sites like the ones in this Toxic Villages video (just found it on "Current.com") , where I was repelled by the smell of burning wire, but focused on how much ingenuity went into the reuse (most of the economics), and was horrified by government efforts to arrest people for 'gray market' refurbishment. Since I also visited the "Big Secret Factories" which do fantastic jobs of recycling good monitors, I kind of saw these villages as a byproduct of legitimate recycling. And as a former Peace Corps teacher, I just liked the story of Chinese repairpeople becoming billionaires (two of the wealthiest Chinese are a former tractor refurbisher and bicycle repairman).

However, I also got an uneasy feeling... Even if MY container is mostly good stuff, how do I follow it through a place like this? Even if I saw wire stripped by hand, I could smell burned wire from somewhere over the fence. It was like ordering a 'virgin bloody mary' in a titty bar. If my wife came in I'd have an alibi but it would not look good. This led us to clean our loads up to go directly to factories, bypassing these middleman operations.

But the problem, as seen in the video, is getting your stuff mixed up with a dirty economy. We send no CRTs to China at all any more, because the chain of custody is too blurry, even if the shipments to Malaysia are much more expensive. And we don't send CPUs or printed circuit boards there, which could wind up boiled in a nasty, polluting, aqua regia process.

We do sell plastic and metal scrap, including keyboards and laser printers, on the open market, and I know from end-market follow-up that those go to China. I am trying to get those to factories I have photos of, but the economics of lower standards may cause me to give up on those after completing the current purchase order. We shipped the material to ElectroniCycle for years, and to Colt in 2007, but keyboards and printers don't shred well.

Here's a fair description (from Tarzan, a yahoo blog which also has a link to the Current.com video). He refers to municipal electronics recycling in China, but the same dynamic exists for commercial scale copper wire.

Efforts to recycle e-waste safely in China have struggled. Few people bring in waste, because the illegal operators pay more.

"We're not even breaking even," said Gao Jian, marketing director of New World Solid Waste in the northeastern city of Qingdao. "These guys pay more because they don't need expensive equipment, but their methods are really dangerous."

The city of Shanghai opened a dedicated e-waste handling center last year, but most residents and companies prefer the "guerrilla" junkers who ride through neighborhoods on flatbed tricycles ringing bells to attract customers, said Yu Jinbiao of the Shanghai Electronic Products Repair Service Association, a government-backed industry federation.

"Those guerrillas are convenient and offer a good price," Yu said, "so there is a big market for them."

On a commercial scale, if you send a containerload of wire to be dealt with at a fine factory, it's difficult not to imagine the broker in Hong Kong diverting it somewhere else, either for profit or because a customs official is having a bad day. The Jiangxi copper smelter is the most modern in the entire world. But the odds of my copper wire winding its way through the streets of Guiyu and coming out at the smelter are pretty low.

Here are some step-by-step instructions for the 'slippery slope' of Chinese scrap exports, based on personal experience:

The good factory I originally dealt with, and still deal with I think, refurbishes floppy disk drives (A: drives) and power supplies and ink cartridges in commercial quanties. A year ago, I got 35 cents each for the floppy drives, no Apple, no bent metal, etc., and they were picked up here by single palletloads for consolidation at the USA office. Power supplies needed to be ATX or ATX2, and we got 65 cents each. We scrapped the rest.

But that buyer found they could get these cheaper if they buy them from a Hong Kong scrap dealer, and started telling us they'd rather buy ALL the FDDs at 15 cents per pound, a huge savings. We still separated the good ones, and still sold the load a pallet or two at a time. Any while it still went through a 'bad neighborhood', we still showed pictures of the factory in Guangxi, even if the Guangxi factory is getting most of its FDDs and PS from a demanufacturer in China. The Good truth just got a little Ugly.

So we wound up shipping our demanufactured parts to or through a Chinese demanufacturing competitor. We take the PCs apart in Middlebury, but send the power supplies and Floppy Disk Drives on a container that now may follow on a trek through a village that is also dismantling a competitor's PCs. And USA export-based competitors can really blur the story, saying they send to the same end market we do.

The Chinese guy says they want more materials. Baled plastic. Baled Steel. So far, so good (if a bit ugly). Why not ship direct?

They ask for laser printers. Hmm. Well, they don't shred well. But we didn't send them, until our USA processor rejected them. Anyway, what's to worry about in a printer? Why bale printers if there are factories that take the cartridges and refurb them? The question became whether to bale them first. The buyer sent photos of a factory, which I verified was in Shenzhen, which resold printer parts and plastic, and the factory preferred they not be baled or shredded. So we started putting those printers on the sea container with the metal and plastic bales...

Now they really, really want copper wire. It's better than mining, right? And the photos I took of the women stripping the copper into huge rooms of bright and shiny metal, I liked those women. Well, I better still send the copper wire to our domestic recycler. But if there's a spot to fill on the container, with the power supplies and Floppy drives... tempting... Then the Chinese buyer hints he's getting it from the domestic recycler anyway. Is he bluffing?

And more and more of our clients are cutting the copper wire off, and throwing the VCRs and printers into scrap metal containers. Many insist they are doing us a favor if we take them for free. Truck fuel hits $5/gallon. A major Earth Day one-day recycling event has only paid half of the bill, the rest looking doubtful after 120 days payable. Staff are due a pay raise....

Ok, as a compromise, we don't believe there is a reuse market for VCRs, so we will sell them but will shred or bale them. But if you are out of baling wire...

The importer wants printed circuit boards and hard drives? ... BAD! NO! CRTs? Out of the question. But if one of our laser printers is caught on film in the same warehouse as someone else's CRTs, boards and hard drives, will people believe those are not our hard drives box right next to it?

And how do I keep our staff believing we are different than a mobster with 1/3 my payroll who puts everything, everything, straight on the boat? How does the mobster believe we are different? And a reputable, all domestic, Pledge Signing shredding company? How can he allow himself to feel the careful exporter is different from the mobster? Printer shredding... does the plastic and metal and little pieced of circuit board go to a different location in China?

Does the location for the shredded material hire happier, safer people than the ones interviewed in the Current.com video?

An independent analyst would probably say that the course most USA electronics recyclers choose to invest in has more to do with market demand and scale of operation than anything else. If we are going to operate in the green mountains of Vermont, we have to run an ecological shop (clients are not rich, but eco-proud). But we also have to collect old TVs to maintain volume, and if 50% of your material is TVs, a shredder doesn't help you much.

Facility space is cheap enough, and pay is low enough, we can take more time on a load than a company in Northern California. And I have Middlebury College grads and lots of travel interest, so I want to find the truth about where stuff goes.

And we would not have even made the trip or come to these conclusions without the attention BAN.org brought to the village of Guiyu in this current.com video. You know, the lady being interviewed in Guiyu, she's smiling. She doesn't take herself too seriously by any means, and she's got a pretty lousy job sorting out printer parts or stripping wire. The way the video ends with health research on the village is actually the best effort to move the story forward... the lead in blood levels are falling. Is that going to be info the mobster 100% exporter misuses to undercharge me? Or will the Shredding Investor tsk-tsk the data and imply it is deceptive.

Oh what a tangled worldwide web we weave... if first we practice, then deceive. In fact, when two identical monitors have different ethical destinations (one can be repaired, the other screen burned), you have to describe a pretty tangled web. And the people who tell you a simple story, that both monitors are repaired, or both monitors should be shredded, isn't that more deceptive than the tangled up story?

You can see the temptation to just shred everything, or the temptation to just export everything. An untangled web in view can look pretty tangled at the other end, where people are stuck with either an unrepairable unit or little pieces of non-intact units that they have to quality sort. Recyclers don't intend to deceive, but we put the best possible light on the path we have chosen, and perhaps deceives nevertheless.